Choosing a short-term disability plan built into the employer’s health insurance plan can help improve the health of a worker who has a disability and can return to work as quickly and safely as possible. (Photo: Shutterstock)
Over the past year, the pandemic has shed multiple insights and has forced us to pause and think about our wellbeing in its entirety. For employers, they can play a key role in promoting the general well-being of workers, going beyond benefits to support mental and physical health, but also benefits to maintain their financial health. Disability insurance is one of the safest ways employers can protect workers from loss of income, but the availability of this benefit remains limited. The US Bureau of Labor Statistics reported in March 2020 that only 40% of American workers had access to a short-term disability, while 35% had access to a long-term disability.
Proper preparation and delivery of disability benefits on the part of the employer can ensure that workers receive full support in the event that they experience a disability. Disability plans can include features to help patients recover as quickly as possible, and by incorporating these benefits into your medical plan, you can further improve outcomes for both employees and employers.
Related: Did the pandemic teach us about disability insurance?
Let’s discuss the different options available to employers, the importance of a comprehensive disability benefit package, why incorporating disability benefits into the health insurance plan, and how employers can promote disability benefits to let their employees know they are valued and protected.
What options do employers have?
The options available to employers fall into two categories: short-term and long-term disability benefits. Short-term disability pensions support workers for a short period of time – be it a few weeks or a few months – by replacing a percentage of income when an employee is unable to work due to a qualifying disability. Long-term disability benefits differ in that benefits can be paid for a longer period of time, be it for many months, years or even until an employee reaches retirement age.
A benefit program that includes both short-term and long-term benefits ensures workers have the full financial protection they need, but not all employers can afford both benefits based on their budget. If neither is feasible, it is important to look at at least short-term disability opportunities. Short-term incapacity for work is required of many U.S. workers at some point in their careers, especially considering that 25% of today’s 20-year-olds are likely to become unemployed for at least a year due to a disability.
Cost becomes a critical component as employers consider adding new benefits to their health, vision, and dental plans. Employers can choose to cover the full cost of a disability plan premium, pay part of the premium and pay the remainder of the premium from employees, or offer a voluntary plan in which employees pay the full premium based on a deduction from wages. Disability plans can be set up, with the employee’s premium paid pre-taxed, which can help reduce the employee’s tax liability.
The importance of a comprehensive package of benefits in the event of disability
When considering a disability package, it is important to understand the primary causes of qualifying disability conditions. The most common claims include pregnancy, mental health, and chronic illness, all of which will affect most employees over the course of their careers.
Pregnancy:
Pregnancy is the most common source of disability claims and accounts for 25% of short-term claims. The majority of working women plan to have children, as 86% state that they will have children until the end of their childbearing age. Employers should consider a large percentage of female workers who require postpartum leave and optimize their disability offerings to ensure the disability insurance that new mothers need when they recover.
In addition to the medical risks of pregnancy and childbirth – including postpartum depression – the cost of care during this time can put a financial burden on families. For women earning the average U.S. professional salary of $ 49,764, taking 12 weeks of unpaid vacation permitted under the Family and Medical Leave Act translates into approximately $ 11,484 lost in wages. If both parents have to go back to work to make up for the loss of income, childcare can cost up to $ 2,000 per month.
When you add in the cost of prenatal care and postpartum costs such as formula, diapers, and clothing, giving birth to a baby by the baby’s first birthday can cost tens of thousands of dollars. Since short-term disability plans can cover disabilities due to both pregnancy and postpartum complications, new mothers can receive partial income replacement during the period of disability.
Mental health:
While disability plans provide coverage for qualifying disabilities due to mental illness. Disability plans often include a membership support program with a toll-free number that employees can call at any time, regardless of whether the employee has a disability claim. These member support programs can help with stress, work-life balance, childcare, and many other issues. Member support programs often offer teletherapy or two-way video counseling visits by licensed counselors, which were particularly valuable during the COVID-19 pandemic.
The pandemic has severely affected Americans’ emotional wellbeing with orders to stay at home, work from home, kids online to school, and even unemployment. A recent study by the American Psychological Association found that nearly eight in ten adults say the coronavirus is a significant source of stress in their lives.
In addition, member support programs often offer financial and legal services that can help alleviate stress and anxiety related to financial or legal issues. While current circumstances may be temporary, these services will continue to be of value even after the pandemic ends, as the psychological and financial effects will be long-term. Member support programs, included in many disability plans, can provide the support employees need during stressful times.
Unexpected injuries:
In addition, employers should consider unexpected accidents and injuries, including complications from surgery, that could result in workers being unable to work for an extended period of time.
More physically demanding jobs have a higher risk of injury, but office workers can also get injured after work or at the weekend. In fact, according to the National Safety Council, a disabling injury occurs every second in the United States. Accidents can happen to anyone, so disability insurance is an important part of a financial wellness strategy for all employees.
Why disability benefits should be integrated
Choosing a short-term disability plan built into the employer’s health insurance plan can help improve the health of a worker who has a disability, helping them get back to work as quickly and safely as possible, and in some cases even help to avoid a disability claim. A very important benefit of integrated short-term disability and health insurance plans is lower costs for both the disability and health insurance plans, as well as a streamlined entitlement process that helps employees get their benefits quickly if they are disabled due to a disability.
A benefit strategy that combines disability and health insurance plans enables earlier detection and better treatment of health conditions that can lead to disability. A well-designed integrated disability and health insurance plan can lead to improved health outcomes by ensuring that employees get the right resources and services when they need them, lowering costs for employees and employers, and promoting better overall health care for employees with disabilities .
What can employers do to promote disability benefits?
Given the role of disability insurance as a contribution to income maintenance when workers are unable to work due to a qualifying disability and its ability to provide additional support services, employers should research their disability plans so they can effectively communicate to their workers what is available by taking out disability insurance.
You can provide information to new employees to help them understand why it is in their best interests to sign up, or for plans that include a buy-up option, choose the higher disability benefit. Disability agencies typically provide resources to employers to assist them in promoting their disability plans.
It’s also important for employers to promote the aforementioned membership support programs to their employees as well, so they know how to get the help they may need.
Even if disability insurance is an important part of a well-designed benefit package, it is often overlooked. This should not be the case, as well-rounded, integrated health and disability benefits can lead to better outcomes for employees with chronic and disabled conditions and can lower the overall cost of health care. The advantages are obvious, which is why it is in the employer’s interest to provide employees with comprehensive support by offering comprehensive disability benefits and by educating them about the value of enrollment.
Scott Towers is President of Specialty Products at Anthem Blue Cross and Blue Shield.
Continue reading:
Comments are closed.